Peter Bazalgette, the UK head of Endemol, producer of Big Brother, was paid £4.6m last year following a multi-million pound payout from an incentive scheme.

Mr Bazalgette and his senior colleagues earned £12.2m in payments from the scheme last year, pushing Endemol UK into a pre-tax loss of £5.7m. The company's loss comes as its eponymous parent prepares for a flotation later this year or at the beginning of 2006.

The 52-year-old chairman of Endemol UK earned £4.3m from a long-term incentive plan set up in 1998, on top of a basic salary of £217,000. His pay packet for 2003 was £1.5m, including a payment of £1.3m under the same scheme.

Revenues at Endemol's British arm rose 8% to £97.3m last year, while gross profit climbed from £15.8m in 2003 to £19.1m. The pre-tax loss of £5.7m compares with a profit of just under £1m in 2003.

Sources close to the company said it had increased turnover by an average of 20% since 1998 - the year the incentive scheme was put in place. None of the executives, including Mr Bazalgette, own stakes in the company and it is understood that the incentive scheme paid out in spectacular fashion last year because it had accumulated seven years worth of payments.

The success of Big Brother has come to define Endemol in the UK and around the world, as well as becoming one of the group's most lucrative programmes. This year Mr Bazalgette published a book on the Big Brother cultural phenomenon - a show that he says "challenged the ethics of an entire generation" - called Billion Dollar Game. The book's title refers to the money earned by Endemol's co-founder, Dutchman John de Mol, when he sold the business five years ago.

The show's success has brought notoriety as well as riches for Endemol's UK boss. The Daily Mail nominated the former head of the Cambridge University union as one of its 100 "worst Britons" for bringing Big Brother to the UK. Endemol's other successes include Changing Rooms and Nathan Barley.

Endemol was bought by Telefónica, the Spanish telecoms group, for £3.5bn five years ago at the height of the dotcom boom. As well as running the UK outpost, Mr Bazalgette is chief creative officer of the entire group, a post formerly held by Mr de Mol. Mr Bazalgette is also tipped to become chief executive of Endemol if it floats. Telefónica is expected to float part of the production company on the London Stock Exchange in order to get a valuation for the business before selling it.

Mr Bazalgette made his name as the owner of Bazal, the production company behind BBC hit Food and Drink. He sold the company in 1990 to Broadcast Communications, then owned by Guardian Media Group, publisher of the Guardian. Broadcast Communications became GMG Endemol in 1998 when Endemol bought a 50% stake. The company was then renamed Endemol UK two years later when Endemol bought out GMG's shareholding.

Endemol UK reported strong business last year, producing 8,000 hours of programming, 36 new commissions and screening 147 shows in total. New commissions this year include two Channel 4 comedy shows. In an attempt to diversify away from reality television shows, a drama arm has also been set up by Paul Marquis, the former executive producer of the Bill and creator of high-trash ITV hit Footballers' Wives.